Simon Property Group has abandoned its bid for Capital Shopping Centres saying CSC did not provide the information it needed to proceed.
The American-based owner of shopping centres valued CSC at £2.9bn after making a bid of 425p a share in cash in December.
Last week, however, CSC said its value could rise to 625p a share, which valued the company at £4.2bn.
Simon holds a 5.1% stake in CSC and opposes a CSC proposal to buy Peel's Trafford Centre with its shares.
Simon argues the deal will dilute shareholders and it reserved the right to sell some or all of its existing stake in CSC.
In a statement, Simon Property Group said: "Access to satisfactory due diligence from CSC is the only non-waivable outstanding precondition to Simon announcing a firm offer. If a firm offer were to be announced, it would be subject to a number of conditions including a non-waivable condition relating to the Trafford acquisition not proceeding.
"Despite numerous overtures from Simon and in full knowledge that Simon, given this due diligence precondition, is not able to announce a firm offer without it, the CSC board has refused to share any due diligence information with Simon. Simon therefore has no alternative other than to announce that it does not intend to make an offer for the entire share capital of CSC, and CSC shareholders are unfortunately thereby deprived of the option to sell their shares pursuant to such an offer."
Simon was given until Wednesday to make a firm bid for CSC or withdraw its offer.
Peel proposes to sell its £1.6bn Trafford Centre to CSC and in turn take a 23.2% stake in the company.